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Downsizing Blog

Most of the debate over extending the Bush tax cuts has focused on whether to extend slightly lower marginal rates for higher earners who already bear a huge burden. But at the other end of the income spectrum, a growing share of Americans don’t pay income taxes. Indeed, the Bush tax cuts increased the share of U.S. households that pay no income tax.

A joint report issued by Republicans on the Senate Finance and House Oversight and Government Reform committees finds that Amtrak’s management interfered with investigations by its inspector general and effectively forced his resignation in 2009.

In conjunction with a proposal to leave the Bush tax cuts in place for two additional years, Republican House Minority Leader John Boehner also called for reducing non-security discretionary spending to 2008 levels. Unfortunately, this category represents a relatively small portion of the overall federal budget, and would only be about $100 billion less than what the president wants to spend.

A new study from economists Russell Sobel and George Crowley finds that federal subsidies to the states results in higher future state taxes. Specifically, the authors find that future state taxes increase by between 33 and 42 cents for every dollar the states receive in federal subsidies. A similar effect was found for federal and state aid to local governments.

In a speech to union supporters in Wisconsin, President Obama announced his intention to take the country $50 billion deeper into debt in order to finance more public infrastructure projects. The president defended his abysmal economic record by claiming that he has had to take on “powerful interests who had been dominating the agenda in Washington for too long.”

The finances of the U.S. Postal Service are deeply in the red. The agency faces a permanently reduced demand for its services and its labor accounts for almost 80 percent of its costs. Thus it is not a good time for postal employees to get an increase in wages and benefits, right?

The administration underestimated the magnitude of the economic imbalances that spawned the recession, and overestimated the government’s ability to quickly right the ship. Despite the Obama administration’s massive economic interventions, unemployment remains high and the economy is still sluggish. The administration has been defending itself by claiming that its actions prevented a worse recession or even a depression.

The National Flood Insurance Program was created in 1968 to allow flood-prone communities to purchase insurance protection from the government. Overseen by the Federal Emergency Management Agency, the program was supposed to alleviate the need for emergency federal aid. Instead, communities still receive emergency aid in addition to insurance payments.

Alaska’s Juneau Empire recently examined the state’s Manufacturing Extension Partnership and found that its claims of success aren’t backed by reality. MEPs are a nationwide network of centers that provide technical and managerial assistance to small and medium-sized firms. Federal funds from the Department of Commerce pay for one-third of the costs of MEP centers, with the balance of costs being paid by state and local governments and the private sector.